Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show the:
a) same cost structure in total.
b) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000.
c) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000.
d) total variable costs of $148,000.
Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show the:
a) same cost structure in total.
b) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000.
c) direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000.
d) total variable costs of $148,000.
Related questions
Steelcase Inc. is one of the largest manufacturers of officefurniture in the United States. In Grand Rapids, Michigan, itproduces filing cabinets in two departments: Fabrication and TrimAssembly. Assume the following information for the FabricationDepartment:
Steel per filing cabinet............................................. 55 pounds
Direct labor per filing cabinet...................................... 20 minutes
Supervisor salaries................................................ $180,000 permonth
Depreciation...................................................... $28,000 permonth
Direct laborrate................................................... $21 perhour
Steel cost......................................................... $0.40 perpound
Prepare a flexible budget for 12,000, 15,000, and 18,000 filingcabinets for the month of August 2014, similar to Exhibit 5,assuming that inventories are not significant.
| STEELCASE INC.FABRICATION DEPARTMENT | |||||||||
| Flexible Production Budget | |||||||||
| August 2014 | |||||||||
| (assumed data) | |||||||||
| Units of production | |||||||||
| Variable cost: | |||||||||
| Direct labor | |||||||||
| Direct materials | |||||||||
| Total variable cost | |||||||||
| Fixed cost: | |||||||||
| Supervisor salaries | |||||||||
| Depreciation | |||||||||
| Total fixed cost | |||||||||
| Total department cost | |||||||||
| Supporting calculations: | |||||||||
| Wages/Direct labor: | |||||||||
| Units of production | |||||||||
| Hours per unit | |||||||||
| Total hours of production | |||||||||
| Wages per hour | |||||||||
| Total wages | |||||||||
| Direct materials: | |||||||||
| Units of production | |||||||||
| Pounds per unit | |||||||||
| Total pounds | |||||||||
| Cost per pound | |||||||||
| Total direct materials | |||||||||
Flexible Budget for Fabrication Department
Cabinaire Inc. is one of the largest manufacturers of officefurniture in the United States. In Grand Rapids, Michigan, itproduces filing cabinets in two departments: Fabrication and TrimAssembly. Assume the following information for the FabricationDepartment:
| Steel per filing cabinet | 46 pounds |
| Direct labor per filing cabinet | 30 minutes |
| Supervisor salaries | $117,000 per month |
| Depreciation | $22,000 per month |
| Direct labor rate | $18 per hour |
| Steel cost | $1.44 per pound |
Prepare a flexible budget for 8,000, 10,000, and 12,000 filingcabinets for the month of October 2016, similar to Exhibit 5,assuming that inventories are not significant. Enter all amounts aspositive numbers.
| CabinaireInc-Fabrication Department | |||
| FlexibleProduction Budget | |||
| October 2016(assumed data) | |||
| Units of production | 8,000 | 10,000 | 12,000 |
| Variable cost: | |||
| Direct labor | $ | $ | $ |
| Direct materials | |||
| Total variable cost | $ | $ | $ |
| Fixed cost: | |||
| Supervisor salaries | $ | $ | $ |
| Depreciation | |||
| Total fixed cost | $ | $ | $ |
| Total department cost | $ | $ | $ |
